Indicted Ex Utah Attorney General Was bribed by Overstock.com

Indicted Former Utah Attorney General Mark Shurtleff was bribed by Overstock.com too by Sam Antar

My experience in dealing with former Utah Attorney General Mark Shurtleff goes way back. On October 30, 2007, Overstock.com, Inc. (NASDAQ:OSTK) paid him $5,000 purportedly as a “campaign contribution.” Two weeks later, Overstock.com issued a press release together with a defamatory “open letter” written by Shurtleff making baseless allegations against me. It was no coincidence. Instead it was a blatant effort by its CEO Patrick Byrne to get me to back off from investigating securities law violations and other illegal conduct by him and his company.

It was only a matter of time before the law caught up with Mark Shurtleff’s pattern of soliciting and receiving illegal bribes in return for favors. Yesterday, he was arrested by FBI agents and local law enforcement along with another former Utah Attorney General John Swallow. The charges yesterday concern other donors, not Byrne. He may be protected by the statute of limitations, or maybe not. His behavior needs to be examined by the prosecutors in the Shurtleff-Swallow case. What we do know is that Shurtleff, judging from the indictment, was a lot dirtier than even my experience with him indicates.

Shurtleff, who served 12 years as attorney general before making Swallow his handpicked Republican successor, was charged with 10 felony counts, including receiving or soliciting bribes, accepting gifts, tampering with witnesses and evidence, and participating in a pattern of unlawful conduct.

The news was no surprise to me and other long-time critics of Overstock.com, Inc. (NASDAQ:OSTK). Since 2006, my blog has exposed lies to investors by Patrick Byrne dating back to 1999 and a series of illegal accounting maneuvers used by Overstock.com to materially overstate its earnings and report phony profits when it was losing money. My accounting analysis was proven correct by the company’s later revisions of accounting practices and restatements of financial reports. In many cases, those corrections were forced upon it by the Securities and Exchange Commission. Back in October 2007, Patrick Byrne was desperate to discredit me, hoping I would quit investigating his illegal actions. Byrne went as far as to bribing then serving Utah Attorney General Mark Shurtleff to write a defamatory open letter about me that was republished by Overstock.com as part of a press release.

In August 2007, the Deputy Attorney General Richard Hamp invited me to appear at the Utah Attorney General’s 14th Annual White Collar Crime Conference on October 31, 2007. I agreed to do the presentation for no compensation and paid all travel costs out of pocket. Weeks after the presentation, Chief Deputy Attorney General Kirk Torgensen, in a tape recorded telephone conversation, admitted to me that Overstock.com, Inc. (NASDAQ:OSTK) CEO Patrick Byrne was “tee’d off” about my scheduled appearance at the conference and wanted the Utah Attorney General’s office to cancel it. At the time, Hamp did not tell me that Byrne was upset, but he asked me not to mention Overstock.com during my presentation unless someone questioned me about it. I agreed. That was my only agreement with the Utah Attorney General’s office.

On October 30, 2007, Overstock.com made a $5,000 “campaign contribution” to Utah Attorney General Mark Shurtleff. However, Overstock.com did not publicly report the contribution until months later. A day later, I spoke at the conference. No one asked me about Overstock.com and I did not mention the company.

Praised for teaching at conference

I thought everything had gone well. I received nothing but praise from the Utah Attorney General’s office. The next day, Deputy Attorney General John Kimble sent me an email saying:

Thank you for giving such a dynamic and thought-provoking talk. I’ve received nothing but positive feedback. I hope you enjoyed your brief stay in Salt Lake. Also feel free to contact me if there’s anything I can do for you in the future.

There was a “rock star” in a room full of “good guys” downtown today. It was a bad guy at the “White Collar Crimes Conference. The women auditors were almost in a swoon.

Sam Antar just explained how his family had skimmed $20 million off the top, and then made another $75 million from pumping and dumping Crazy Eddie, Inc. stock in the 1980s.

Chief Deputy Attorney General Kirk Torgenson was a sponge. “When you hear it from somebody who did it, it gives you insights into how they think,” Torgersen (sic) said.

“I’m no rock star, I’m a crook,” Antar said. “White collar crime is just as brutal as violent crime.”

That was Antar’s message. He says the way to crack down is with better auditing and policing. He also says his CPA license was just revoked; that should have happened 15 years ago.

Overstock.com issues press release with open letter from Mark Shurtleff

To my surprise, on November 14, 2007 Overstock.com issued a press release together with an “open letter” from Utah Attorney General Mark Shurtleff. His letter claimed that I broke a purported agreement with his office. In the press release, Patrick Byrne ranted on about me somehow being involved in an illegal media conspiracy to take down his company:

“The letter from the Attorney General of Utah, which Sam has, for a week, ignored and refused to post to his blog as twice requested, speaks to Sam’s perfidy,” Byrne added. “The real investigative business journalists left in this country might explore whose interests are being served by the promotion of Sam Antar by CBS MarketWatch, Dow Jones, and Fortune.”

As Utah Attorney General, I am writing this letter to rebut a blog Sam Antar posted on his website on November 1, 2007. I tried to post this letter as a comment on his blog but Mr. Antar apparently refused to post it….

I was warned that Mr. Antar might use this speaking engagement to suggest that my office or I personally, endorse or support his accusations against Overstock.com or some other public company. Based on that warning, officials in my office secured a promise from Mr. Antar that he would not use this invitation for that purpose. So much for the promises of a convicted felon!

[Note: The open letter was erroneously dated a year later in 2008]

No one from the Utah Attorney General’s office tried to contact me about any complaints, not Shurtleff or anyone else. Utah Attorney General Mark Shurtleff did not even consult with his own Deputy Attorney Generals Richard Hamp and John Kimble before making his reckless lies. They were my contacts at the Utah Attorney General’s office. Later, they confirmed to me that my only agreement was to refrain from mentioning Overstock.com during my presentation unless asked and that I abided by the agreement. In any case, I never suggested that anyone at the Utah Attorney General’s Office endorsed my criticisms of